Delineating property rights in unconventional hydrocarbon resources: Concepts from the United States and Germany

The use of hydraulic fracturing (fracking) and horizontal drilling technologies for recovering unconventional hydrocarbons (oil and gas) has created issues concerning the rights of property owners, energy companies, and others involved with the development and distribution of these resources. Constitutional provisions, legislative statutes, and jurisprudence on liability in the United States and Germany affect rights to oil and gas resources and the profitability of developing these resources. Legal rules for trespass, the rule of capture, pooling, unitization, and municipal fracturing bans circumscribe property rights associated with shale gas development in the United States. Germany, until setting up a specific, long-term legal regime on hydraulic fracturing, will rely on existing mining, water, and environmental legislation (as most recently modified). The evaluation of the law and jurisprudence governing unconventional hydrocarbon development in the U.S. and Germany discloses perceptions and expectations that contribute to widespread extraction in the U.S. while Germany contemplates the safety of allowing hydraulic fracturing.